Ethnic minority 'marijuana entrepreneurs' receive tax breaks

Move follows years of targeted persecution of black and Hispanic cannabis users.

Some states that have legalised marijuana are encouraging minorities to enter the growing cannabis industry after years of drug enforcement that had a disproportionate effect on black and Hispanic communities. A look at some of the efforts nationwide:

California

California voters legalised recreational marijuana in November. The first retail sales are expected in January.

Oakland officials approved a program that initially sets aside half of the city's marijuana licenses for low-income residents who have been convicted of a cannabis crime or who live in a specified neighbourhood where drug enforcement has been intense. Advocates are urging similar programs statewide, including in San Francisco and Los Angeles.

African-Americans made up 5.6% of the state but 16% of marijuana arrests in 2015, according to an AP analysis of statistics collected by the FBI.

Colorado

The first state to legalise marijuana for recreational use does not track industry demographics. A spokesman for the Denver department that oversees marijuana policy, Daniel Rowland, said individual businesses have programs to employ minorities, but nothing is mandated by the city.

A report by the Colorado Public Safety Department found that arrest rates for African-American and Latino juveniles increased after legalization, while the rate for white juveniles went down.

African-Americans made up nearly 4% of the Colorado population in 2015 and 11% of arrests.

Florida

Florida lawmakers passed a bill last year to address issues that arose with the state's 2014 medical marijuana law, including provisions to favour black farmers.

The provisions ensure that once the state's medical marijuana patient registry reaches 250,000, three additional cultivation licenses will be made available, with one of them designated for a member of the Florida Black Farmers and Agriculturists Association.

Black farmers in Florida were among thousands across the country who sued the U.S. Department of Agriculture for racial discrimination, saying they had been unfairly denied government loans and subsidies in the 1980s and 1990s. The case ended with an historic settlement in 1999.

Maryland

The state's roll-out of medical marijuana has been marred by lawsuits filed by groups that were not among the 15 chosen by the state for cultivation licenses. None of the 15 was minority-owned, despite language in the law that requires regulators to seek "racial, ethnic and geographical diversity" in the awarding of licenses.

The General Assembly ended its legislative session last month without acting on a bill designed to create diversity by allowing up to seven more licenses to grow marijuana, with two going to companies that are suing the state and five others for minority-owned companies after a disparity study is conducted. The Legislature's Black Caucus has called for a special session to consider the bill.

Minority groups comprise about 48% of Maryland's population, including nearly 30% African-American. Blacks made up roughly 57% of cannabis arrests in 2015.

Massachusetts

The 2016 ballot question that legalised recreational marijuana included language to encourage participation in the cannabis industry by people who were "disproportionately harmed" by enforcement of marijuana laws in the past. The law does not exclude people with past marijuana convictions from applying for a retail license or working in a cannabis business.

Boston City Council member Ayanna Pressley has drafted proposed legislation that would direct 20 percent of unexpended revenue from state and local marijuana taxes toward programs to assure racial equity, including efforts to reduce financial barriers to ownership of businesses.

Ohio

The state's 2016 medical marijuana law included some licenses set aside for minority businesses, but it's questionable whether that provision would stand in court.

The benchmarks require at least 15 percent of Ohio's marijuana-related licenses to go to the businesses of one of four economically disadvantaged minority groups — blacks, Hispanics, Asians or Native Americans — so long as an adequate number apply.

Legal experts have questioned whether the racial-preference provision would stand up in court, though no legal challenge has been filed to date.

Pennsylvania

Lawmakers passed a medical marijuana law in 2016, and subsequent regulations written by the Pennsylvania Department of Health included policies to ensure that medical cannabis organizations "foster participation of diverse groups in all aspects of their operations."

Specifically, the rules require that applicants for cultivation and dispensing permits include in their initial applications a diversity plan that spells out how they will achieve racial equity through ownership, employment and contracting.

The agency is also required to make special efforts to help minorities learn how to apply for cultivation and dispensing permits. At least four predominantly minority groups have applied for medical marijuana permits, according to Philadelphia City Councilman Derek Green.

Brian Smith, spokesman for the Washington State Liquor and Cannabis Board, said the board is interested in diversifying licensees and may use targeted outreach to ethnic communities if they decide to license more people in the future.

West Virginia

The state in April became the 29th in the U.S. to approve of marijuana use for certain medical conditions. The new law includes a provision requiring state regulators to seek ways of encouraging minority-owned businesses to apply for growing licenses.

The black share of arrests for Maryland, Ohio and West Virginia were based on crime statistics that covered about 80 percent of each state's population. Shares for other states were based on statistics covering at least 90 percent of each state's population.